Chinese news reading app Toutiao acquires Flipagram

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Popular video app Flipagram is getting acquired by Chinese company Toutiao for an undisclosed amount. Flipagram was once a social media darling but the startup has been quiet recently. Flipagram will remain an independent product for the time being and the team will stay in its own office in the U.S.

Recode first reported that Flipagram was looking for a buyer. Flipagram had raised a big $70 million Series B round from Sequoia, Kleiner Perkins and Index Ventures back in 2015.

Toutiao is a news reading app recommending you articles and videos. The company plans to integrate Flipagram videos in those recommendations, so that should improve Flipagram’s reach.

In addition to that, Toutiao seems quite happy that it now has an office in the U.S. Maybe the company plans to expand beyond China in the months to come. Toutiao has 175 million monthly active users in China.

Flipagram lets you create music videos in just a few taps. You can combine videos and photos, choose a soundtrack and share the result with your friends. While this is a compelling format, it’s hard to create a new social graph when you’re competing with social media giants, such as Snapchat and Instagram.

And it’s hard to convince users that they should use Flipagram before sharing their videos on Instagram or Snapchat given that they can already create stories in those apps. Snapchat and Instagram stories have become more sophisticated and people got used to watching stories on those social networks already.

In addition to that, other social music apps have become quite popular as well. Apps like Musical.ly have managed to attracts tens of millions of users.

It makes you wonder if you can still create new photo or video formats on mobile. Many companies have tried, but it seems like Snapchat and Instagram are the only two mobile-first winners in this space. Products like Frontback, Mindie, Vine and now Flipagram couldn’t manage to create sustainable growth. It’s still too early to tell what’s going to happen to Prisma.

All those formats are fascinating, but the main challenge is the social element. It’s hard to make people open your app every day to check yet another feed.